Experts: Tri-Cities poised for jobs, industrial growth

DOVER — Demand for industrial space in the Seacoast is rising fast as more companies consider moving or expanding existing operations there.

But with vacancy rates near historic lows in the Portsmouth area and few parcels available for new development, local real estate experts say new investment and jobs could soon begin flowing to the Tri-City Region.

“New construction north of Portsmouth will definitely be where the action is,” David Choate, executive vice president of Colliers International’s Portsmouth office, told members of Portsmouth’s Economic Development Commission Friday.

“It’s not going to be south and I don’t think it’s going to be west due to lack of infrastructure. It’s going to be Dover, Somersworth and Rochester,” he continued.

The vacancy rate for industrial space in greater Portsmouth during the third quarter of this year was about 3.4 percent, compared to about 12 percent over the same period last year, according to market data provided by Colliers.

Over the same period, asking prices for industrial space increased to about $7.10 per square foot, compared to about $6.47 a foot last year.

Vacancy data for industrial space in the Dover-Rochester region was not available.

Bob Marchewka, principal broker for One Commercial Real Estate in Portsmouth and a member of the city’s economic commission, agrees the Tri-Cities are positioned well for growth.

“Historically, nobody wanted to go over the bridge. Psychologically, it was a barrier,” he said Monday. “Companies would say, ‘We want to move to New Hampshire, but we want to stay south of the General Sullivan Bridge.’”

That’s beginning to change.

“The combination of little or no land left for (industrial) development … and the fact that Dover, Rochester and Somersworth to some extent have city water and sewer and a fair amount of land zoned properly will certainly add to the demand for industrial space.”

City officials in the Tri-Cities are already seeing growth. More importantly, they’re trying to position themselves to capitalize on the improving economy.

For instance, the city of Dover is considering three parcels to build another business park on the scale of Enterprise Park, which is nearly full.

“What the community is looking at now is, is there another location in the city that we can invest in to prepare a new business park to continue this for the next 20 years?” said city manager Mike Joyal.

He expects a firm proposal within six to 12 months.

Rochester deputy city manager and economic development manager Karen Pollard says her city has already seen the industrial, commercial and residential real estate sectors pick up.

“We’ve all been working closely (with Somersworth and Dover) and also individually to be ready to attract new investment and to put all the things in place we need so that when the economy gets into full swing we can be very successful,” she said.

Although land is typically cheaper in the Tri-Cities than along the Seacoast, it still costs quite a bit more to build new facilities than buy existing ones. So when might that demand arrive? According to Marchewka, it’s coming sooner than later.

“The issue is, industrial is inherently a slow-moving sector,” he said. “You don’t move an industrial plant in six months. It takes years of planning and decisions and it takes a good economy ... to be growing enough to warrant moving and expansion.”

But, he says, “I think it’s closer to three to five years than it is to 20.”